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Hatteras Financial Corp. operates as an externally-managed mortgage real estate investment trust (REIT). The company has a P/E ratio of 7.50. Currently there are 5 analysts that rate Hatteras Financial Corporation a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Hatteras Financial Corporation has been 815,300 shares per day over the past 30 days. Hatteras Financial Corporation has a market cap of $2.7 billion and is part of the real estate industry. Shares are up 10.4% year to date as of the close of trading on Tuesday.

TheStreet Ratings rates Hatteras Financial Corporation as a
hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, attractive valuation levels and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

The revenue growth came in higher than the industry average of 16.4%. Since the same quarter one year prior, revenues rose by 45.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.

Net operating cash flow has increased to $126.14 million or 20.79% when compared to the same quarter last year. Despite an increase in cash flow, HATTERAS FINANCIAL CORP's cash flow growth rate is still lower than the industry average growth rate of 38.95%.

In its most recent trading session, HTS has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.

The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, HATTERAS FINANCIAL CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.